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Searching 2021-2022 Session

The Vermont Statutes Online

 

Title 8: Banking and Insurance

Chapter 072: GENERAL PROVISIONS

  • § 2100. Application of chapter

    (a) Except as otherwise provided in this part, this chapter applies to a person doing or soliciting business in this State as described in this part.

    (b) This chapter does not apply to:

    (1) development credit corporations subject to chapter 65 of this title; or

    (2) independent trust companies subject to chapter 77 of this title. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 1.)

  • § 2101. Definitions

    Except as otherwise provided in this part:

    (1) "Commercial loan" means a loan or extension of credit that is described in 9 V.S.A. § 46(1), (2), or (4). The term does not include a loan or extension of credit secured in whole or in part by an owner occupied one- to four-unit dwelling.

    (2) "Commissioner" means the Commissioner of Financial Regulation.

    (3) "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting securities or other interest of any other person.

    (4) "Depository institution" has the same meaning as in 12 U.S.C. § 1813 and includes any bank and any savings association as defined in 12 U.S.C. § 1813. The term also includes a credit union organized and regulated as such under the laws of the United States or any state.

    (5) "Dwelling" has the same meaning as in 15 U.S.C. § 1602.

    (6) "Federal banking agencies" means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the National Credit Union Administration, and the Federal Deposit Insurance Corporation or any successor of any of these.

    (7) "Holder" means:

    (A) the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession;

    (B) the person in possession of a negotiable tangible document of title if the goods are deliverable either to bearer or to the order of the person in possession; or

    (C) the person in control of a negotiable electronic document of title.

    (8) "Immediate family member" means a spouse, child, sibling, parent, grandparent, or grandchild, aunt, uncle, nephew, niece, including stepparents, stepchildren, stepsiblings, step grandparents, step grandchildren, and adoptive relationships. The term also includes former spouses dividing property in connection with a divorce or separation.

    (9) "Individual" means a natural person.

    (10) "Insurance company" means an institution organized and regulated as such under the laws of any state.

    (11) "Licensee" means a person required to be licensed or registered under this part.

    (12) "Material litigation" means a litigation that according to generally accepted accounting principles is deemed significant to an applicant's or a licensee's financial health and is required to be disclosed in the applicant's or licensee's annual audited financial statements, report to shareholders, or similar records.

    (13) "Mortgage loan" means a loan secured primarily by a lien against real estate.

    (14) "Nationwide Multistate Licensing System and Registry" or "Nationwide Mortgage Licensing System and Registry" or "NMLS" means a multistate licensing system developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators and operated by the State Regulatory Registry LLC for the licensing and registration of non-depository financial service entities in participating state agencies, or any successor to the Nationwide Multistate Licensing System and Registry.

    (15) "Person" has the same meaning as in 1 V.S.A. § 128.

    (16) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

    (17) "Residential mortgage loan" means a loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on either a dwelling or residential real estate, upon which is constructed or intended to be constructed a dwelling.

    (18) "Residential real estate" means real property located in this State, upon which is constructed or intended to be constructed a dwelling.

    (19) "Responsible individual" means an individual who is employed by a licensee and has principal, active managerial authority over the provision of services in this State.

    (20) "State" means a state of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States, except that when capitalized the term means the State of Vermont.

    (21) "Unique identifier" means a number or other identifier assigned by protocols established by the Nationwide Multistate Licensing System and Registry.

    (22) "Unsafe or unsound practice" means a practice or conduct by a person licensed to do business in this State that creates the likelihood of material loss, insolvency, or dissipation of the licensee's assets, or otherwise materially prejudices the interests of its customers. (Added 2019, No. 20, § 2.)

  • § 2102. Application for license

    (a) Application for a license or registration shall be in writing, under oath, and in the form prescribed by the Commissioner, and shall contain the legal name, any fictitious name or trade name, and the address of the residence and place of business of the applicant, and if the applicant is a partnership or an association, of every member thereof, and if a corporation, of each officer and director thereof; also the county and municipality with street and number, if any, where the business is to be conducted and such further information as the Commissioner may require.

    (b) At the time of making an application, the applicant shall pay to the Commissioner a fee for investigating the application and a license or registration fee for a period terminating on the last day of the current calendar year. The following fees are imposed on applicants:

    (1) For an application for a lender license under chapter 73 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee for the initial license. For each additional lender license from the same applicant, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (2) For an application for a lender license under chapter 73 of this title for a lender only making commercial loans, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (3) For an application for a mortgage broker license under chapter 73 of this title, other than a mortgage broker that meets each of the requirements of subdivisions (b)(4)(A)-(B) of this section, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (4) For an application for a mortgage broker license under chapter 73 of this title that meets each of the following requirements, $250.00 as a license fee and $250.00 as an application and investigation fee:

    (A) the applicant is an individual sole proprietor; and

    (B) no person, other than the applicant, shall be authorized to act as a mortgage broker under the applicant's license.

    (5) For an application for a mortgage loan originator license under chapter 73 of this title, $50.00 as a license fee and $50.00 as an application and investigation fee.

    (6) For an application for a sales finance company license under chapter 73 of this title, $350.00 as a license fee and $350.00 as an application and investigation fee.

    (7) For an application for a loan solicitation license under chapter 73 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (8) [Repealed.]

    (9) For an application for a consumer litigation funding company registration under chapter 74 of this title, $200.00 as a registration fee and $300.00 as an application and investigation fee.

    (10) For an application for a money transmission license under chapter 79 of this title, $1,000.00 as a license fee, $1,000.00 as an application and investigation fee, and $25.00 as a license fee for each authorized delegate location.

    (11) For an application for a check cashing and currency exchange license under chapter 79 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (12) For an application for a debt adjuster license under chapter 83 of this title, $250.00 as a license fee and $500.00 as an application and investigation fee.

    (13) For an application for a loan servicer license under chapter 85 of this title, $1,000.00 as a license fee and $1,000.00 as an application and investigation fee.

    (14) For an application for a personal information protection company license under chapter 78 of this title, $500.00 as a license fee and $500.00 as an application and investigation fee.

    (c) In connection with an application for a license, the applicant, each officer, director, and responsible individual of the applicant, each person in control of the applicant, and any other person the Commissioner requires in accordance with NMLS guidelines or other multistate agreements, shall furnish to the Nationwide Multistate Licensing System and Registry information concerning each person's identity, including:

    (1) fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, and international criminal history background check;

    (2) personal history and experience in a form prescribed by the Nationwide Multistate Licensing System and Registry, including the submission of authorization for the Nationwide Multistate Licensing System and Registry and the Commissioner to obtain:

    (A) an independent credit report and credit score obtained from a consumer reporting agency described in 15 U.S.C. § 1681a for the purpose of evaluating the applicant's financial responsibility at the time of application; and the Commissioner may obtain additional credit reports and credit scores to confirm the licensee's continued compliance with the financial responsibility requirements of this part;

    (B) information related to any administrative, civil, or criminal findings by any governmental jurisdiction; and

    (3) any other information required by the Nationwide Multistate Licensing System and Registry or the Commissioner.

    (d) The applicant shall provide a list of any material litigation in which the applicant has been involved in the 10-year period preceding the submission of the application.

    (e) If an applicant is a corporation, limited liability company, partnership, or other entity, the applicant shall also provide:

    (1) the date of the applicant's incorporation or formation and state or country of incorporation or formation;

    (2) if applicable, a certificate of good standing from the state or country in which the applicant is incorporated or formed;

    (3) a brief description of the structure or organization of the applicant, including any parent or subsidiary of the applicant, and whether any parent or subsidiary is publicly traded;

    (4) the legal name, any fictitious or trade name, all business and residential addresses, and the employment, in the 10-year period preceding the submission of the application, of each executive officer, manager, responsible individual, director of, or person in control of, the applicant;

    (5) a list of any criminal convictions, material litigation, or disciplinary actions in which any executive officer, manager, responsible individual, director of, or individual in control of, the applicant has been involved in the 10-year period preceding the submission of the application;

    (6) a copy of the applicant's audited financial statements for the most recent fiscal year and, if available, for the two-year period preceding the submission of the application;

    (7) a copy of the applicant's unconsolidated financial statements for the current year, whether audited or not, and, if available, for the two-year period preceding the submission of the application;

    (8) if the applicant is publicly traded, a copy of the most recent 10-K report filed with the U.S. Securities and Exchange Commission; and

    (9) if the applicant is a wholly owned subsidiary:

    (A) a copy of audited financial statements for the parent company for the most recent fiscal year; and

    (B) of a corporation publicly traded in the United States, a copy of the parent corporation's most recent 10-K report filed with the U.S. Securities and Exchange Commission, or if the applicant is a wholly owned subsidiary of a corporation publicly traded outside the United States, a copy of similar documentation filed with the regulator of the parent corporation's domicile outside the United States.

    (f) If the applicant is not an individual, the name and address of the applicant's registered agent in this State.

    (g) Upon the filing of an application, the Commissioner shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant and any person named in the application. The Commissioner may conduct an on-site investigation of the applicant, the cost of which the applicant shall bear pursuant to section 18 of this title.

    (h) This section does not apply to a person applying for a commercial lender license under section 2202a of this title. (Added 2019, No. 20, § 2; 2019, No. 70, § 1; amended 2019, No. 103 (Adj. Sess.), § 2; 2021, No. 25, § 2, eff. May 12, 2021.)

  • § 2103. Approval of application and issuance of license

    (a) Upon the filing of an application, payment of the required fees, and satisfaction of any applicable bond and liquid asset requirements, the Commissioner shall issue a license to the applicant if the Commissioner finds:

    (1)(A) The financial responsibility, experience, character, and general fitness of the applicant command the confidence of the community and warrant belief that the business will be operated honestly, fairly, and efficiently pursuant to the applicable chapter of this title.

    (i) If the applicant is a partnership or association, such findings are required with respect to each partner, member, and responsible individual of, and each person in control of, the applicant.

    (ii) If the applicant is a corporation, such findings are required with respect to each officer, director, and responsible individual of, and each person in control of, the applicant.

    (B) For purposes of assessing whether a person is financially responsible, the Commissioner may consider how the person has managed his or her own financial condition, which may include factors such as whether the person has:

    (i) current outstanding judgments, except judgments solely as a result of medical expenses;

    (ii) current outstanding tax liens or other government liens and filings;

    (iii) foreclosures within the past three years; or

    (iv) a pattern of seriously delinquent accounts within the past three years.

    (2) Allowing the applicant to engage in business will promote the convenience and advantage of the community in which the applicant will conduct its business.

    (3) The applicant, each officer, director, and responsible individual of, and each person in control of, the applicant, has never had a financial services license or similar license revoked in any governmental jurisdiction, except that a subsequent formal vacation of such revocation shall not be deemed a revocation.

    (4) The applicant, each officer, director, and responsible individual of, and each person in control of, the applicant has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court:

    (A)(i) during the seven-year period preceding the date of the application for licensing and registration; or

    (ii) at any time preceding such date of application, if such felony involved an act of fraud or dishonesty, a breach of trust, or money laundering; and

    (B) provided that any pardon or expungement of a conviction shall not be a conviction for purposes of this subsection.

    (5) The applicant has satisfied the applicable surety bond and liquid asset requirement as follows:

    (A) for an application for a lender license, mortgage broker license, mortgage loan originator license, or loan solicitation license, the applicable bond and liquid asset requirements of sections 2203 and 2203a of this title;

    (B) for an application for a litigation funding company registration, the financial stability requirement of section 2252 of this title;

    (C) for an application for a money transmitter license, the bond and net worth requirements of sections 2507 and 2510 of this title;

    (D) for an application for a debt adjuster license, the bond requirement of section 2755 of this title; and

    (E) for an application for a loan servicer license, the bond requirement of sections 2903 and 2907 of this title.

    (6) For an application for a mortgage loan originator license, the applicant has satisfied the prelicense education requirement of section 2204a of this title and the prelicensing testing requirement of section 2204b of this title.

    (b)(1) If the Commissioner finds the applicant does not meet the requirements of subsection (a) of this section, the Commissioner shall not issue a license.

    (2) Not later than 60 days after an applicant files a complete application, the Commissioner shall notify the applicant of the denial, stating the reason or reasons therefor.

    (3) If the applicant does not file a timely request for reconsideration pursuant to section 2104 of this title, the Commissioner shall:

    (A) return to the applicant any amounts paid for the applicable bond requirement and license fee; and

    (B) retain the investigation fee to cover the costs of investigating the application.

    (c)(1) If the Commissioner finds that an applicant meets the requirements of subsection (a) of this section, he or she shall issue the license not later than 60 days after an applicant submits a complete application.

    (2) Except as otherwise provided in this title, a license is valid until the licensee surrenders the license or the Commissioner revokes, suspends, terminates, or refuses to renew the license.

    (d) For good cause shown and consistent with the purposes of this section, the Commissioner may waive or modify the requirements of subdivision (a)(3) of this section; provided, however, that the Commissioner may not waive the requirement of subdivision (a)(3) of this section for applicants for a mortgage loan originator license.

    (e) If an application remains incomplete for 120 days, the Commissioner may deem the application abandoned or withdrawn.

    (f) This section does not apply to a person applying for a commercial lender license under section 2202a of this title. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 7.)

  • § 2104. Request for reconsideration; review of denial of application

    (a)(1) If the Commissioner denies an application, not later than 15 days after the date of denial the applicant may request that the Commissioner reconsider the application.

    (2) The applicant shall submit his or her request in writing and shall respond specifically to the Commissioner's stated reason or reasons for denial.

    (b)(1) The Commissioner shall reconsider the application in light of the applicant's request and response and issue a decision not later than 60 days after the date of the request.

    (2) If the Commissioner finds that the applicant meets the requirements of subsection 2103(a) of this title, he or she shall issue a license.

    (3) If the Commissioner finds that the applicant does not meet the requirements of subsection 2103(a) of this title, the Commissioner shall not issue a license and shall:

    (A) return to the applicant the bond, if any, and any amounts paid for the applicable license fee; and

    (B) retain the investigation fee to cover the costs of investigating the application.

    (c) The applicant may appeal the Commissioner's decision by filing an action in the civil division of the Washington County Superior Court not later than 15 days after the date the Commissioner denied the request for reconsideration. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 8.)

  • § 2105. Contents of license; nontransferable

    (a) A license shall state the address at which a licensee will conduct its business, shall state fully the name of the licensee, and, if the licensee is not an individual, shall state the date and place of its organization or incorporation.

    (b) A mortgage loan originator license shall state fully the name of the individual, his or her sponsoring company, and the licensed location to which he or she is assigned.

    (c) A licensee shall not transfer or assign a license.

    (d) The Commissioner, in his or her discretion, may issue a license through the NMLS. (Added 2019, No. 20, § 2; amended 2021, No. 25, § 6, eff. May 12, 2021.)

  • § 2106. Additional place of business; change of place of business

    (a)(1) A license is required for each place of business.

    (2) Except as otherwise provided in this title, the Commissioner may issue more than one license to the same licensee for additional places of business if the licensee meets the requirements for each place of business.

    (b)(1) A licensee shall provide written notice to the Commissioner and fee of $100.00 not less than 30 days before changing or closing a place of business.

    (2) Upon receiving the notice and fee, the Commissioner shall record the change of location and the date, and the licensee may operate at the new location. (Added 2019, No. 20, § 2.)

  • § 2107. Change of control

    (a) A licensee shall give the Commissioner notice of a proposed change of control within 30 days of the proposed change and request approval of the acquisition. A money transmitter licensee shall also submit with the notice a nonrefundable fee of $500.00.

    (b) After review of a request for approval under subsection (a) of this section, the Commissioner may require the licensee to provide additional information concerning the proposed persons in control of the licensee. The additional information shall be limited to the same categories of information required of the licensee or persons in control of the licensee as part of its original license or renewal application.

    (c) The Commissioner shall approve a request for change of control under subsection (a) of this section if, after investigation, the Commissioner determines that the person or group of persons requesting approval has the competence, experience, character, and general fitness to operate the licensee or person in control of the licensee in a lawful and proper manner, and that the interests of the public will not be jeopardized by the change of control.

    (d) The Commissioner shall approve or deny a request for change of control not later than 60 days after a complete request is filed and notify the licensee of the decision in a record. The Commissioner for good cause may extend the review period.

    (e) The following persons are exempt from the prefiling requirements of subsection (a) of this section, but the licensee shall notify the Commissioner of the change of control and request the Commissioner's approval using the standards in subsection (b) of this section for a change of control:

    (1) a person that acts as a proxy for the sole purpose of voting at a designated meeting of the security holders or holders of voting interests of a licensee or person in control of a licensee;

    (2) a person that acquires control of a licensee by devise or descent;

    (3) a person that acquires control as a personal representative, custodian, guardian, conservator, or trustee, or as an officer appointed by a court of competent jurisdiction or by operation of law; and

    (4) a person that the Commissioner, by rule or order, exempts in the public interest.

    (f) Subsection (a) of this section does not apply to public offerings of securities.

    (g) Before filing a request for approval to acquire control, a person may request in a record a determination from the Commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the Commissioner determines that the person would not be a person in control of a licensee, the Commissioner shall enter an order to that effect, and the proposed person and transaction is not subject to the requirements of subsections (a) through (c) of this section. (Added 2019, No. 20, § 2.)

  • § 2108. Notification of material change

    (a) A licensee shall notify the Commissioner in writing within 30 days of any material change in the information provided in a licensee's application.

    (b) A licensee shall notify the Commissioner in writing within 30 days of any change in the list of executive officers, managers, directors, or responsible individuals.

    (c) A licensee shall file a report with the Commissioner within 15 business days after the licensee has reason to know of the occurrence of any of the following events involving the licensee, or any executive officer, manager, director, person in control, responsible individual, or equivalent of the licensee:

    (1) the filing of a petition by or against the licensee or such person under the U.S. Bankruptcy Code for bankruptcy or reorganization;

    (2) the filing of a petition by or against the licensee for receivership, the commencement of any other judicial or administrative proceeding for its dissolution or reorganization, or the making of a general assignment for the benefit of its creditors;

    (3) the commencement of a disciplinary proceeding or a license denial against the licensee or such person in a state or country in which the licensee engages in business or is licensed, including any action by the Attorney General of any state;

    (4) the cancellation or other impairment of the licensee's bond or other security;

    (5) a charge or conviction against the licensee or such person for a felony;

    (6) a charge against or conviction of an authorized delegate for a felony;

    (7) receiving notification of the initiation of a class action lawsuit against the licensee; or

    (8) any change in the organizational structure of the licensee or any parent company of the licensee. (Added 2019, No. 20, § 2.)

  • § 2109. Annual renewal of license

    (a) On or before December 1 of each year, every licensee shall renew its license or registration for the next succeeding calendar year and shall pay to the Commissioner the applicable renewal of license or registration fee. At a minimum, the licensee or registree shall continue to meet the applicable standards for licensure or registration. At the same time, the licensee or registree shall maintain with the Commissioner any required bond in the amount and of the character as required by the applicable chapter. The annual license or registration renewal fee shall be:

    (1) For a lender license under chapter 73 of this title, $1,200.00.

    (2) For a lender license under chapter 73 of this title for a lender only making commercial loans, $500.00.

    (3) For a mortgage broker license under chapter 73 of this title, other than a mortgage broker that meets each of the requirements of subdivisions (4)(A)-(C) of this section, $500.00.

    (4) For a mortgage broker license under chapter 73 of this title that meets each of the following requirements, $250.00:

    (A) the mortgage broker license is held by an individual sole proprietor;

    (B) no person, other than the individual sole proprietor, shall be authorized to act as a mortgage broker under this license; and

    (C) the mortgage broker originated five or fewer loans within the last calendar year.

    (5) For a mortgage loan originator license under chapter 73 of this title, $100.00.

    (6) For a sales finance company license under chapter 73 of this title, $350.00.

    (7) For a loan solicitation license under chapter 73 of this title, $500.00.

    (8) [Repealed.]

    (9) For a consumer litigation funding company registration under chapter 74 of this title, $200.00.

    (10) For a money transmission license under chapter 79 of this title, $1,000.00, plus an annual renewal fee of $25.00 for each authorized delegate, provided that the total renewal fee of all authorized delegate locations shall not exceed $3,500.00.

    (11) For a check cashing and currency exchange license under chapter 79 of this title, $500.00.

    (12) For a debt adjuster license under chapter 83 of this title, $250.00.

    (13) For a loan servicer license under chapter 85 of this title, $1.000.00.

    (14) For a personal information protection company license under chapter 78 of this title, $500.00.

    (b) A license originally issued on or after November 1 of the current year is valid for the next succeeding year.

    (c) In addition to the annual renewal fee, on or before April 1 of each year a money transmission licensee shall pay the Department an annual assessment equal to $0.0001 per dollar volume of money services activity performed for, or sold or issued to, Vermont customers for the most recent year ending December 31, which assessment shall not be less than $100.00 and shall not be greater than $15,000.00.

    (d) An individual holding a mortgage loan originator license shall also satisfy the annual continuing education requirement of section 2204c of this title.

    (e) Notwithstanding any other provision of this title, the license of a mortgage loan originator who fails to pay the annual renewal fee or fails to satisfy all of the minimum license renewal standards by December 1 shall automatically expire on December 31.

    (f) Notwithstanding any other provision of this title, the registration of a litigation funding company that fails to pay the annual renewal fee or fails to satisfy all of the minimum registration renewal requirements by December 1 shall automatically expire on December 31. (Added 2019, No. 20, § 2; 2019, No. 70, § 1a; amended 2019, No. 103 (Adj. Sess.), § 3; 2021, No. 25, § 3, eff. May 12, 2021.)

  • § 2110. Revocation, suspension, termination, or nonrenewal of license; cease and desist orders

    (a) The Commissioner may deny, suspend, terminate, revoke, condition, or refuse to renew a license or order that any person or licensee cease and desist in any specified conduct if the Commissioner finds:

    (1) the licensee failed to pay the renewal of license fee or an examination fee as provided in this part, or to maintain in effect the required liquid assets or the bond or bonds required under the provisions of this part, or to file any annual report or other report, or to comply with any lawful demand, ruling, or requirement of the Commissioner;

    (2) the licensee violated any applicable provision of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any rule, order, or directive, adopted pursuant to those provisions;

    (3) the licensee engages in fraud, intentional misrepresentation, or gross negligence;

    (4) the licensee engages in an unsafe or unsound practice;

    (5) the licensee is convicted of a violation of a state or federal anti-money-laundering statute;

    (6) the competence, experience, character, or general fitness of the licensee, person in control of a licensee, or responsible individual of the licensee indicates that it is not in the public interest to permit the person to provide services in this State;

    (7) the licensee fails to continue to meet the initial licensing requirements of this title, or withholds information, or fails to cooperate with an examination or investigation, or makes a material misstatement in a license application, license renewal, or any document submitted to the Commissioner or to the Nationwide Multistate Licensing System and Registry;

    (8) any cause for which issuance of the license could have been refused had it then existed and been known to the Commissioner at the time of issuance, including unconscionable conduct that takes advantage of a borrower's lack of bargaining power or lack of understanding of the terms or consequences of the transaction.

    (9) the licensee has demonstrated a pattern of failure or refusal to promptly pay obligations on payment instruments or transmissions of money, is insolvent, suspends payment of its obligations, or makes an assignment for the benefit of its creditors; or

    (10) a money transmission licensee does not remove an authorized delegate after the Commissioner issues and serves upon the licensee a final order including a finding that the authorized delegate has violated this part.

    (b) The Commissioner may issue orders or directives to any person:

    (1) to cease and desist from conducting business;

    (2) to cease any harmful activities or violations of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any order, directive, or rule adopted pursuant to those provisions;

    (3) to cease business under a license or any conditional license if the Commissioner determines that such license was erroneously granted or the licensee is currently in violation of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any order, directive, or rule, adopted pursuant to those provisions;

    (4) enjoining or prohibiting any person from engaging in the financial services industry in this State;

    (5) to remove any officer, director, employee, responsible individual, or control person; or

    (6) regarding any other action or remedy as the Commissioner deems necessary to carry out the purposes of this part.

    (c) The Commissioner shall provide not less than 15 days' notice and an opportunity to be heard before he or she issues an order or directive pursuant to subsection (b) of this section. Mailing notice to the licensee's current address as stated on the license shall be presumptive evidence of its receipt by the licensee. However, if the Commissioner finds that the public safety or welfare imperatively requires emergency action, action with no prior notice or prior opportunity to be heard may be taken, pending proceedings for revocation or other action. (Added 2019, No. 20, § 2.)

  • § 2111. Revocation, suspension, termination, or nonrenewal where more than one place of business

    The Commissioner may revoke, suspend, terminate, or refuse to renew only the license for a particular place of business at which grounds for revocation, suspension, termination, or refusal to renew may occur or exist, or if the Commissioner finds that such grounds for revocation, suspension, termination, or refusal to renew are of general application to all licensed places of business, or to more than one licensed place of business, operated by such licensee, the Commissioner shall revoke, suspend, terminate, or refuse to renew all of the licenses issued to the licensee or such licenses as such grounds apply to, as the case may be. (Added 2019, No. 20, § 2.)

  • § 2112. Surrender of license; no effect on liability; reinstatement

    (a) A licensee may surrender a license by delivering to the Commissioner notice that the licensee surrenders the license.

    (b) Surrender shall not affect the licensee's administrative, civil, or criminal liability for acts committed prior to surrender. A revocation, suspension, termination, refusal to renew, or surrender of a license does not impair or affect the obligation of a preexisting lawful contract.

    (c) The Commissioner may reinstate a revoked, suspended, terminated, expired, inactive, or nonrenewed license or issue a new license to a licensee whose license was revoked, suspended, terminated, expired, inactive, or nonrenewed if no fact or condition then exists that would have warranted the Commissioner to refuse to issue the license under this part; provided, however, that the Commissioner shall not issue a new license or reinstate a license to a mortgage loan originator whose license was revoked unless the revocation order is vacated. (Added 2019, No. 20, § 2.)

  • § 2113. Appeal of final order

    (a) The Commissioner shall serve his or her findings and order of suspension, termination, revocation, or to cease and desist in specified conduct on the licensee by mail at the licensee's current address as stated on the license, which shall be presumptive evidence of its receipt by the licensee.

    (b) The licensee may appeal the Commissioner's decision by filing an action in the civil division of the Washington County Superior Court not later than 15 days after the date of service. (Added 2019, No. 20, § 2.)

  • § 2114. Rules

    The Commissioner may adopt rules and issue orders, rulings, demands, and findings as is necessary to perform his or her duties under this part. (Added 2019, No. 20, § 2.)

  • § 2115. Penalties

    (a) The Commissioner may:

    (1) impose an administrative penalty of not more than $10,000.00, plus the State's cost and expenses of investigating and prosecution of the matter, including attorney's fees, for each violation upon any person who violates or participates in the violation of this part; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or any lawful rule adopted, or directive or order issued, pursuant to those sections; and

    (2) order any person to make restitution to another person for a violation of this part, chapter 200 of this title, or 9 V.S.A. chapter 4, 59, or 61.

    (b) Each violation, or failure to comply with any directive or order of the Commissioner, is a separate and distinct violation.

    (c) It shall be a criminal offense, punishable by a fine of not more than $100,000.00, or not more than a year in prison, or both, for any person, after receiving an order that directs the person to cease exercising the duties and powers of a licensee and imposes an administrative penalty under this part, to perform the duties or exercise the powers of a licensee until the penalty has been satisfied, or otherwise satisfactorily resolved between the parties, or the order is vacated by the Commissioner or by a court of competent jurisdiction.

    (d)(1) A loan contract made in knowing and willful violation of subdivision 2201(a)(1) of this title is void, and the lender shall not collect or receive any principal, interest, or charges; provided, however, in the case of a loan made in violation of subdivision 2201(a)(1) of this title, where the Commissioner does not find a knowing and willful violation, the lender shall not collect or receive any interest or charges, but may collect and receive principal.

    (2) If a person who receives an order that directs the person to cease exercising the duties and powers of a licensee and imposes an administrative penalty under this part continues to perform the duties or exercise the powers of a licensee without satisfying the penalty, or otherwise reaching a satisfactory resolution between the parties, or securing a decision vacating the order by the Commissioner or by a court of competent jurisdiction, a loan contract made by the person after receipt of such order is void and the lender shall not collect or receive any principal, interest, or charges.

    (e) The powers vested in the Commissioner in this part are in addition to any other powers to enforce penalties, fines, or forfeitures authorized by law. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 9.)

  • § 2116. Administrative procedure

    All administrative proceedings under this part shall be conducted in accordance with 3 V.S.A. chapter 25 and any rules adopted by the Commissioner on hearing procedure. (Added 2019, No. 20, § 2.)

  • § 2117. Examinations and investigations; examination fees

    (a) In addition to any authority allowed under this part or other law, and for the purpose of examination, or discovering or investigating violations or complaints of or arising under this part; chapter 200, subchapter 2 of this title; chapter 200 of this title; 9 V.S.A. chapter 4, 59, or 61; or a rule adopted, or an order or directive issued pursuant to those sections, or securing information required or useful thereunder, and for purposes of initial licensing, license renewal, license suspension, license conditioning, license revocation or termination, or general or specific inquiry or investigation, the Commissioner or his or her representative may:

    (1) conduct investigations and examinations;

    (2) access, receive, and use any books, accounts, records, files, documents, information, or evidence including:

    (A) criminal, civil, and administrative history information, including nonconviction data;

    (B) personal history and experience information, including independent credit reports obtained from a consumer reporting agency described in 15 U.S.C. § 1681a; and

    (C) any other documents, information, or evidence the Commissioner deems relevant to the inquiry or investigation regardless of the location, possession, control, or custody of such documents, information, or evidence.

    (b)(1) The Commissioner may review, investigate, or examine any person, regardless of whether the person has obtained a license under this part, as often as necessary in order to carry out the purposes of this part.

    (2) The Commissioner may direct, subpoena, or order the attendance of, and examine under oath, a person whose testimony is required about the loans or the business or subject matter of an examination or investigation, and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other documents the Commissioner deems relevant to the inquiry.

    (c)(1) A person subject to this part shall make available to the Commissioner upon request the books and records relating to the operations of the person.

    (2) The Commissioner shall have access to the books and records and to interview the officers, principals, responsible individuals, control persons, mortgage loan originators, employees, independent contractors, agents, and customers of the person concerning its business.

    (d) A person subject to this part shall make or compile reports or prepare other information as directed by the Commissioner in order to carry out the purposes of this section, including:

    (1) accounting compilations;

    (2) information lists and data concerning transactions in a format prescribed by the Commissioner; and

    (3) any other information as the Commissioner deems necessary to carry out the purposes of this part.

    (e)(1) In making any examination or investigation authorized by this part, the Commissioner may control access to the documents and records of the person under examination or investigation.

    (2) The Commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept.

    (3) During the period of control, a person shall not remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the Commissioner.

    (4) Unless the Commissioner has reasonable grounds to believe the documents or records of the person have been or are at risk of being altered or destroyed for purposes of concealing a violation of this part, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.

    (f) In order to carry out the purposes of this part, the Commissioner may:

    (1) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;

    (2) enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information, or evidence obtained under this section;

    (3) use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate a person subject to this part;

    (4) accept and rely on examination or investigation reports made by other government officials within or outside this State; or

    (5) accept audit reports made by an independent certified public accountant for the person subject to this part in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in the report of the examination, report of investigation, or other writing of the Commissioner.

    (g) The authority of this section shall remain in effect, whether a person subject to this part acts or claims to act under any licensing or registration law of this State, acts without such authority, or surrenders his or her license.

    (h) No person subject to investigation or examination under this section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information.

    (i) The Commissioner may, in the case of any person subject to this part who does not maintain a Vermont office, accept reports of examinations prepared by another state or federal regulatory agency as substitutes if such reports are available to the Commissioner and are determined to be adequate in exercising his or her powers and discharging his or her responsibilities under this part.

    (j)(1) A person subject to this part shall pay to the Department all fees, costs, and expenses of any examination, review, and investigation as prescribed by section 18 of this title, which fees, costs, and expenses shall be billed when they are incurred.

    (2) In addition to the powers set forth in section 2110 of this title, the Commissioner may maintain an action for the recovery of examination, review, and investigation fees, costs, and expenses as prescribed in section 18 of this title in any court of competent jurisdiction.

    (k) Information obtained during an examination or investigation under this part shall be confidential and privileged and shall be treated as provided in section 23 of this title. (Added 2019, No. 20, § 2.)

  • § 2118. Joint examinations

    (a)(1) The Commissioner may conduct an on-site examination in conjunction with representatives of other state agencies or agencies of another state or of the federal government.

    (2) Instead of an examination, the Commissioner may accept the examination report of an agency of this State or of another state or of the federal government or a report prepared by an independent certified public accountant.

    (b)(1) A joint examination or an acceptance of an examination report does not preclude the Commissioner from conducting an examination as provided by law.

    (2) A joint report or a report accepted under this subsection is an official report of the Commissioner for all purposes. (Added 2019, No. 20, § 2.)

  • § 2119. Records required of licensee

    (a)(1) A licensee shall keep, use in the licensee's business, and make available to the Commissioner upon request, the books, accounts, records, and data compilations as will enable the Commissioner to determine whether the licensee is complying with the provisions of this part and with the rules adopted by the Commissioner.

    (2) A licensee shall preserve the books, accounts, records, and data compilations in a secure manner for not less than seven years after making the final entry on any loan recorded therein.

    (3) After the seven-year retention period, the licensee shall dispose of the books, accounts, records, and data compilations in accordance with 9 V.S.A. § 2445.

    (b) A licensee may maintain records in any form permitted in subsection 11301(c) of this title. (Added 2019, No. 20, § 2.)

  • § 2120. Annual report; call reports

    (a)(1) In addition to any specific information required by the applicable chapter, annually, on or before April 1, a licensee shall file a report with the Commissioner to provide the information the Commissioner reasonably requires concerning the business and operations conducted in this State during the preceding calendar year.

    (2) The licensee shall submit the report under oath and in the form the Commissioner requires.

    (3) For good cause, the Commissioner may extend the due date for the annual report required by this subsection.

    (4) If a licensee does not file its annual report on or before April 1, or within any extension of time granted by the Commissioner, the licensee shall pay to the Department $1,000.00 for each month or part of a month that the report is past due, beginning on the date that is five business days after April 1 or the last date of such extension, as applicable.

    (b)(1) Annually, not later than 90 days after the end of its fiscal year, a licensee shall file financial statements with the Commissioner in a form and substance acceptable to the Commissioner, which financial statements shall include a balance sheet and income statement.

    (2) This subsection does not apply to a lender making only commercial loans.

    (c) A licensee shall submit to the Nationwide Multistate Licensing System and Registry reports of condition in a form and including the information the Nationwide Multistate Licensing System and Registry requires, if applicable.

    (d) The Commissioner may require more frequent reports from any licensee. (Added 2019, No. 20, § 2; amended 2019, No. 103 (Adj. Sess.), § 10; 2021, No. 25, § 4, eff. May 12, 2021.)

  • § 2121. Deceptive advertising

    (a) A person subject to this part shall not advertise, print, display, publish, distribute, or broadcast or cause or permit to be advertised, printed, displayed, published, distributed, or broadcast, a statement or representation that is false, misleading, or deceptive.

    (b) The Commissioner may order a person to cease conduct that violates this section. (Added 2019, No. 20, § 2.)

  • § 2122. Use of other names or business places

    (a) A licensee shall not conduct business or make a loan subject to regulation under this part under any other name or at any other place of business than as specified in its license.

    (b) Mortgage loan originators and employees of licensees may work remotely through a licensed location without being physically present at such location, provided the mortgage loan originator or employee is assigned to a licensed location, is adequately supervised by the licensee, and the licensee and the mortgage loan originator or employee meet such additional conditions as the Commissioner may require.

    (c) This section does not apply to a commercial loan made to a borrower located outside Vermont for use outside Vermont. (Added 2019, No. 20, § 2; amended 2021, No. 25, § 7, eff. May 12, 2021.)

  • § 2123. Licenses modified, amended, or repealed by amendment to this part

    The State of Vermont may amend or repeal this chapter so as to effect a cancellation or alteration of a license or right of a licensee, provided that such an amendment or repeal shall not impair or affect an obligation under a preexisting lawful contract. (Added 2019, No. 20, § 2.)

  • § 2124. Nationwide Multistate Licensing System and Registry

    (a) In furtherance of the Commissioner's duties under this part, the Commissioner may participate in the Nationwide Multistate Licensing System and Registry and may take such action regarding participation in the licensing system as the Commissioner deems necessary to carry out the purposes of this part, including:

    (1) issue rules or orders, and establish procedures, to further participation in the Nationwide Multistate Licensing System and Registry;

    (2) facilitate and participate in the establishment and implementation of the Nationwide Multistate Licensing System and Registry;

    (3) establish relationships or contracts with the Nationwide Multistate Licensing System and Registry or other entities designated by the Nationwide Multistate Licensing System and Registry;

    (4) authorize the Nationwide Multistate Licensing System and Registry to collect and maintain records and to collect and process any fees associated with licensure on behalf of the Commissioner;

    (5) require persons engaged in activities that require a license under this part to utilize the Nationwide Multistate Licensing System and Registry for license applications, renewals, amendments, surrenders, and such other activities as the Commissioner may require and to pay through the System all fees provided for under this part;

    (6) authorize the Nationwide Multistate Licensing System and Registry to collect fingerprints on behalf of the Commissioner in order to receive or conduct criminal history background checks;

    (7) in order to reduce the points of contact which the Federal Bureau of Investigation may have to maintain for purposes of this part, use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting information from and distributing information to the Department of Justice or any governmental agency; and

    (8) in order to reduce the points of contact that the Commissioner may have to maintain for purposes of subsection 2102(c) of this chapter, use the Nationwide Multistate Licensing System and Registry as a channeling agent for requesting and distributing information to and from any source so directed by the Commissioner.

    (b)(1) The Commissioner may require persons engaged in activities that require a license under this part to submit fingerprints, and the Commissioner may utilize the services of the Nationwide Multistate Licensing System and Registry to process the fingerprints and to submit the fingerprints to the Federal Bureau of Investigation, the Vermont State Police, or any equivalent state or federal law enforcement agency for the purpose of conducting a criminal history background check.

    (2) The licensee or applicant shall pay the cost of such criminal history background check, including any charges imposed by the Nationwide Multistate Licensing System and Registry.

    (c) A person engaged in an activity that requires a license under this part shall pay all applicable charges to utilize the Nationwide Multistate Licensing System and Registry, including the processing charges the administrator of the Nationwide Multistate Licensing System and Registry establishes, in addition to the fees required under this part.

    (d) The Nationwide Multistate Licensing System and Registry is not intended to and does not replace or affect the Commissioner's authority to grant, deny, suspend, terminate, revoke, or refuse to renew licenses. (Added 2019, No. 20, § 2.)

  • § 2125. Report to Nationwide Multistate Licensing System and Registry

    (a) Subject to State privacy and confidentiality laws, and subject to section 2126 of this title, the Commissioner shall report regularly violations of this part, enforcement actions, and other relevant information to the Nationwide Multistate Licensing System and Registry.

    (b) A licensee may challenge information the Commissioner reports to the Nationwide Multistate Licensing System and Registry in accordance with 3 V.S.A. chapter 25 and any rules adopted by the Commissioner on hearing procedures. (Added 2019, No. 20, § 2.)

  • § 2126. Confidentiality

    In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing:

    (1)(A) The privacy or confidentiality of any information or material provided to the Nationwide Multistate Licensing System and Registry, and any privilege arising under federal or state law with respect to such information or material, including the rules of any federal or state court, shall continue to apply to the information or material after the information or material is disclosed to the Nationwide Multistate Licensing System and Registry.

    (B) The Commissioner may share the information and material with state and federal regulatory officials who have oversight authority without affecting the privilege or confidentiality protections provided by federal law or state law.

    (2) The Commissioner may enter agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, State Regulatory Registry LLC, or other associations representing governmental agencies.

    (3) Information or material that is subject to privilege or confidentiality under subdivision (1) of this section is not subject to:

    (A) disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or

    (B) subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to a privilege held by the Nationwide Multistate Licensing System and Registry, the person to whom such information or material pertains waives the privilege.

    (4) This section does not apply to information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators that are included in the Nationwide Multistate Licensing System and Registry for access by the public. (Added 2019, No. 20, § 2.)